Why Didn't I Learn This in School: Life on Loan

These days loans are more complicated. But if you understand how they work, your experience can still be just as sweet.

To get started, you need to figure out what kind of loan you want. Personal loans are for any kind of personal expense, which includes paying off debt. Mortgages are for your new house, auto loans, small business loans -- or to launch your new vegan donut shop.

Another building block of loans that's crucial to understand is interest. Interest is the money that the lender charges for the money you borrow.

In a fixed rate loan, the interest stays the same while you pay it back, but a variable rate loan can change over time. For student loans, you don't need collateral, and the interest rate is low. For federal student loans you even get a fixed interest rate, and you don't have to start paying them back until after you've graduated.

See the most valuable banks in America:

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The most valuable banks in America

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The most valuable banks in America

1. JPMorganChase

Current worth: $2.47 Trillion

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5. U.S. Bancorp

Current worth: $438.5 Billion

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6. PNC Financial

Current worth: $361.3 Billion

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7. Capital One

Current worth: $339.1 Billion

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8. BB&T

Current worth: $221.9 Billion

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If you have too many monthly payments, a consolidated loan can take them all and put them under one loan. But, be careful -- Doing this can have you owing more, so always check the terms before you apply.

Next, understand what type of loan you need. A secured loan means you put down some collateral. With an unsecured loan, there is no collateral, so the interest is higher -- and some will even need an additional co-signer.